STATE BANK OF INDIA vs M s NET 4 Communications Ltd on 4 June 2025

FINAL ORDER

This original application has been filed by the applicant bank, on 27.01.20L6 through Ms. Geetha Jacob, Branch Manager of the applicant bank, under Section 19 of the RDB Act, 1993 against the defendants for recovery of a sum of Rs.22,40,88,2961- together with cost, charges and pendentellite and future interest from date of filing of this O.A. till the realization in full.

2. The brief facts of the case are that at the request of defendants, the applicant bank sanctioned a Cash Credit Facility of Rs.15 Crores on 13.04.2013, with qA'

TANO.20812023 2 one-way inter- changeability from Cash Credit to LC up to Rs. 7 Crores, out of Rs.59 Crores (FBWC Limit of Rs.31 Crores) and (Non FBWC Limit of Rs.28 Crores), under Multiple Banking/Consortium Pattern with other banks i.e., (1). State Bank of Hyderabad in FB of Rs.14.37 Crores and in NFB of Rs.12.83 Crores. (2). United Bank of India in FB of Rs.8.63 Crores and in NFB of Rs.8.17 Crores. (3). State Bank of Travancore in FB of 15.00 Crores and in NFB of Rs.7.00 Crores. The salient features of the grant of the Credit Facilities of Rs.15.00 Crores, by the applicant bank to the Borrower in the nature of Credit Facilities i.e., Cash Credit (Hyp) of Rs.15.00 Crores, Total Fund Based Working Capital (FBWC) of Rs.15'00 Crores, Lefter of Credit (ILC)/FLC- Interchangeable) of Rs.7.00 Crores, Total Non-Fund Based Working Capital (NFBWC) of Rs.7.00 Crores and Total (Fund Based and Non-Fund Based) of Rs.15.00 Crores. The defendant nos.2 & 3 are directors of the defendant no.1 and the Chairman & Mg. Director and Director respectively of defendant no.5. The defendant nos.2 to 4 have extended their personal guarantees in respect of Credit Facilities granted by the applicant bank to the defendant no.1. The defendant no.5 is corporate guarantor of the borrower in respect of the credit facilities granted by the applicant bank. The defendant nos.6 & 7 are members of Consortium along with applicant bank, having extended the Credit Facilities to the defendant no.1. The defendant no'6 was agreed to be and nominated as lead bank' The defendant no.6 and 7 are also having pari-passu charge over the movable and immovable assets of the defendant no.l and the defendant no.3 and 5 along with applicant A

TANO.208v2023 3 bank. The defendant no.8 has been appointed as the official Liquidator of the defendant no.1 Company (In Liquidation), vide order dated 06.08.2015, passed by the Hon'ble High Court of Calcutta in C.P No. 76012013, in the matter of M/s Net 4 Communication Limited (In Liquidation), filed by M/s SREL Equipment Finance Ltd., and the defendant no.8, being a proper and necessary pafi, has been as such, impleaded in the array of defendant in the present O.A. The defendant no.1 executed all necessary loaning documents on 13.04.2013. It is submitted that in consideration of availing the Credit Facilities, a Deed of Hypothecation Dated 13.04.2013 was executed by the defendant no.l in favour of the applicant bank, thereby hypothecating its entire present and future Current Assets, Boo Debts, present and future goods and its all other movable assets, including documents of title to goods and all machinery belonging to or in the possession or under its control, in respect of CC facility and charge on goods covered under the LC covering import/purchase of raw materials, stores and spares etc., with overall extension of charge on its current assets for LC limit, the raw materials comprising of Routers, IP Phones, Wireless Adaptor, Seruers, Switiches, Networking Equipments, Softwares, International Calling Cards etc. It is submifted that in consideration of availing the Credit Facilities, a Pari- Passu 1s Charge by way of equitable mortgage was created by defendant no.1. i.e., Commercial Propefi being Flat No.3E, 3'd Floor, East India House, 208, Abduk Hameed Street, Kolkata, having already deposit its title deeds in respect of the said property with the defendant no.6 and eAgitable mortgage was created by €"\

TANO.208U2023 4 the defendant nos.4 and 5 on their immovable property situated by Plot No.70, 1* Floor, Poorvi Marg, Vasant Vihar, New Delhi msg. 767 q. yds. having already deposit its title deeds in respect of the said propefi with the defendant no.6. In view of the loaning and security documents executed by defendant nos.1 to 5 and the charge created by them on their respectively properties, by way of Primary and Collateral Security, both by way of hypothecation and equitable moftgage, which have been registered with the appropriate as per law, the liability of defendant nos.1 to 5 to pay all the outstanding liabilities of the defendant no.1 to the applicant is joint and several and coextensive. The defendant nos.6 and 7, who had also extended Credit Facilities to the defendant no'1 along with the applicant bank, had ceded Pari-Passi charge in favour of the applicant bank in respect of the movable and immovable properties of the defendant no.l as well as the immovable property of the defendant no.3 and 5. The defendant no.1 had fully availed and utilized the entire sanctioned working capital limits of Rs.15 Crores, granted by the applicant to it on the individual documentation basis, as per the terms of sanction.

3. It is fufther submitted that the defendants enjoyed and utilized the Loan facility, but failed to maintain the financial discipline and failed to repay the due amounts. The applicant bank requested the defendants to regularize the loan account by visits and letters, but there was no response from the defendants, hence the account was classified as NPA on 28.11.2013. Therefore, the applicant bank served a sl TA NO. 2081/2023 5 legal demand notices dated t7.02.2015 and 07.12.2015 to the defendants but failed to recover the same. Thus, the present O.AffA is preferred by the applicant bank to recover its dues.

4. On notice by this Tribunal, the defendant nos' !,3,4,5 and 6 put appearance through counsel but failed to file WS and evidence. The right of defendant nos. 3,4 and 5 to file WS was closed vide order dated

16. LL.2017. The defendant nos. 7 and 8 failed to put appearance at all.

5. The applicant bank has filed evidence by way of affidavit of Shri Kamal Singh Meena, Chief Manager and of the applicant bank as Paper No.1 to Paper No.256 along with the OA which have gone unchallenged and un-rebutted. Hence, the case of the applicant bank stands fully established against the defendants with respect to non-payment of EMI/ outstanding amount'

6. After perusing the records, this Tribunal is of the view that the applicant bank has proved its case beyond reasonable doubts. The evidence and documents lead by the applicant bank not rebutted by the defendants by not placing any evidence and there is no question of disbelieving the evidence lead by the applicant bank based upon the wriften/printed documents. In the light of the above discussions, the present TA deserves to be allowed. €^

TA NO. 208t/2023

ORDER

1) I hereby allow this T.A. of the Applicant Bank and direct the defendant nos. 2 to 5 to pay jointly and severally to the applicant bank within 30 days from today, a sum of Rs.22,40,88,296/- along with cost, expenses and interest @ 14.45o/o from the date of filing of this O.A which has become TA till the date of realization.

2) In case of failure to deposit the above amount within the stipulated period, the same shall be recovered from the sale of hypothecated assets and the sale of Propefi bearing Flat No.3E, 3d Floor, East India House, 20B, Abdul Hameed Street, Kolkata, and Property bearing Plot No.70, 1* Floor, Poorui Marg, Vasant Vihar, New Delhi. In case of shoft fall, the same shall be recovered from the sale of the personal movable and immovable assets of the defendant nos. 2 to 5.

3) Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-Il, Delhi.

4) The registry of this Tribunal is hereby directed to issue free copy of the order and send the same to both the parties. <-\

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TANO.208U2023 7

5) Parties are direct to appear before the Ld. Recovery Officer, DRT-II, Delhi on 04.08.2025. Pending IAs, if any, stand disposed of. File be consigned to records. Date: 04.06.2025 o. (SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi This judgement has been signed, dated and pronounced in open court. 9-\ Date :04.06.2025 (susHr L ru ulnnnsio'ci) PRESIDING OFFICER DRT-II, Delhi T i1